NANCHANG, March 1 (Xinhua) -- Authorities in east China's Jiangxi Province have called for prudent investment in automobile projects amid a weak auto market.
More efforts will be made to avoid blind investment and misconduct in new auto facilities, particularly in the new energy vehicle (NEV) sector, according to a circular issued by the provincial development and reform commission.
The circular ordered local governments not to roll out preferential tax, funding and land policies for auto investment projects, as it went against the rules of the market economy and affected market competition.
Local governments also are forbidden to help win approvals for new auto investment projects using misconduct, including investment split-offs, information cover-ups and false application information.
The auto industry in Jiangxi has seen good growth in recent years, triggering high enthusiasm for auto investment, particularly in the NEV sector, it said.
China's auto sales, however, dropped last year as a slowdown in the economy dent consumer spending.
China sold 28.08 million autos last year, down 2.76 percent year on year, according to the China Association of Automobile Manufacturers.
The NEV industry was a bright spot, with annual NEV sales surging 61.74 percent year-on-year to 1.26 million units last year.
Despite strong growth spurred by government policy support in recent years, there are worries that overheated investment in the NEV sector could trigger excess capacity in the future.